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ACC makes recommendations on levy cuts

24 July 2014

ACC makes recommendations on levy cuts

After considering public feedback, ACC has made some changes to the proposed 2015/16 levies it consulted on during May and June, but will still recommend that the Government implements across the board levy cuts next year.

“We haven’t changed the combined value of all the levy cuts we’re recommending, but we have recommended changing how we apportion levy cuts across ACC motor vehicle levies, which include licence levies and the ACC petrol levy,” says ACC Chairperson, Paula Rebstock.

ACC is recommending the following changes to levies in 2015/16:
• 21% reduction to average work levy
• 5% reduction to earners’ levy
• 40% reduction to combined average motor vehicle levies.

“We’ve taken on board feedback that applying a large chunk of motor vehicle levy cuts to the petrol levy would disadvantage those who travel low mileages in their vehicles, and who therefore buy less petrol.”

“As a result, we’re now recommending that the petrol levy be cut to 7.9 cents per litre, rather than 5.9 cents per litre as we originally proposed.

“To balance this smaller cut to the petrol levy, we’re recommending bigger cuts to annual licence levies.

“In the final wash, vehicle owners will benefit from the same overall level of levy cuts that we originally proposed. The cuts will just be spread more fairly across annual licence levies and the petrol levy.”

ACC is not recommending cuts to motorcycle levies, which are already heavily subsidised by other vehicle owners.

Ms Rebstock says the changes made to the cuts originally proposed by ACC show the important role that public consultation plays.

“We consider all the submissions we receive, and where a good case for change is made, we take this into account when shaping our recommendations.”

Risk rating, which would see car owners pay a levy that reflects how their vehicle’s design affects injury outcomes in a crash, remains part of the levy changes ACC is recommending to the Government.

“We received good support for risk rating, and if the Government gives us the green light to implement it, we’ll continue to work closely with key stakeholders to fine tune the way risk rating will be applied to different vehicles, to ensure this meets industry expectations as much as possible.”

Ms Rebstock says that while owners of safer cars will benefit the most from ACC’s recommended motor vehicle cuts, all car owners will pay lower levies if the cuts are implemented.

“This is a significant package of levy cuts we’re recommending, made possible by the fact that the ACC Scheme is now fully funded.”

Full funding means ACC has sufficient financial assets to meet the lifetime costs of all existing claims.

“The scheme is in a strong financial position, and we’re committed to lifting the level of service that ACC provides, to ensure this is a scheme that all New Zealanders have full trust and confidence in.”

ENDS

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